December 2006

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Fastenal is boring but profitable. It's been growing at about 15% a year just being a middleman for fasteners. How can they pull it off? Well, neither buyers nor sellers have a lot of market power. The buyers are generally dispersed, and they're not going to band together and demand better pricing on some bolts. And for sellers, they have the best distribution system by far - apparently it can be hard to ship fasteners, some of which are heavy or oddly-shaped. [more]

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In the words of Pat Dorsey, Apollo's shares are "unbearably cheap". I plan to buy soon, with real money. It's a wide-moat stock, under short-term pressures. The upside is huge. The downside, not so big.

Sadly for my CAPS rating, I picked it before it fell off a cliff and dropped 30%. But I'm confident it will rebound.

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My favorite stock right now is probably Compton Petroleum. Despite the name, it deals mainly with natural gas, the prices of which are fluctuating somewhat. I think the long-term demand for natural gas will be good, though, and that bodes well for Compton. I think that the shares have been under short-term pressure, and that they're significantly undervalued.

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The best direct purchase plan I've yet seen would have to go to Banco Popular (BPOP). They don't charge for account setup, or for share purchases. In fact, when reinvesting dividends, they give you a 5% discount on share purchases, taking the average share price for the month. They conduct all share purchases on the 15th of the month, so you can't time your purchases for after a big drop, but this isn't exactly a very volatile stock. [more]